Opening demat accounts has always been a question, not just for minors but also for adults. Demat account for minors might sound a little off the grid, but it is possible to have an account with the name of minors as well.
Well! We got you covered. Here we are discussing the requirements, process, and charges imposed to open a demat account for minors.
But before that, let’s first briefly talk about what a demat account is?
The initial question here is, what is a demat account? Initially, the stocks were stored physically, and it used to be very difficult to always maintain them. The end of these problems is a demat account.
Demat account lets the traders keep their securities and shares in an online form and in one place. During the entire trading process, the demat account stores the shares.
A minor in India is anyone who is below the legal mark of 18 years. Is it accurate to open a trading account for someone who is not past that legal age?
Here in this article, we will discuss everything about the opening and functioning of the demat account for minors.
Demat Account for Minors in India
One of the most essential and initial things of the stock market is the possession of a demat account. Recently, there have been a lot of minors who have a demat account under their names.
It is possible to open a demat account in a minor’s name on some terms and conditions. The major one being the supervision of a guardian.
The minor can have a demat account when looked at by a parent or guardians officiated by the court.
The formalities related to transfer are fewer when compared to the proper demat accounts. Also, starting at such an early age can help the child get an insight into financial planning at a very young age.
Let us now look at the procedure of opening a demat account of minors. Although the procedure is not cumbersome or complicated, some steps need to be followed.
The process of opening a demat account is not a very tiring or cumbersome one. So, if you are thinking of giving a push start to the further career of your child in the stock market, then you should not give it a second thought and begin right away.
Let us now take a glance at the procedure of opening a demat account for minors.
1. The first step is to fill the KYC forms. You can fill them either online (as provided by most of the brokers) and also offline.
There are two KYC forms, and one has to be filled by the guardian/parent and the other by the minor. The signature in both the forms will be of the parent or the guardian.
2. The next step is to produce the required documents and fulfill all the KYC norms. A list of required documents is provided later in the article.
3. Once the documents are checked and verified, the account becomes operational.
The process of opening a demat account for your child is like a cakewalk. Let us now take a look at the necessary documents that are required.
Since the demat account of a minor is under the control/supervision of an adult, he has to provide all the details. The guardians or parents of the minor have to produce some documents for the Depository Participant.
The necessary documents required for the opening of the minor’s demat account are listed below.
A valid proof of identity (eg. Aadhar card)
Proof of address
Photographs (of parent/guardian and minor)
PAN card of the guardian/parent
PAN card of the minor
After the Depository Participant approves the documents, then the process is carried forward. There is also a requirement for the PAN card of both the minor and the parent.
After the successful verification of all the necessary documents, the account is opened for the minor.
Can We Open Demat Account for Minors?
The main question now is, can we open a demat account for minors? The answer is, yes, we can. It is common and very convenient to open a demat account for minors, and it stays till the person crosses the minor age.
Although the process is easy and the goal is achievable, some restrictions still come along with it.
The minor account is not allowed to trade in every arena. E.g., a minor account holder can sell in equity intraday and even Futures & Options.
There is also a restriction on minors regarding a joint demat account. They cannot be a part of it.
Motilal Oswal gives you the facility of opening a demat account for minors. A company that started as a small sub-broking unit now has a very trusted and broad client base.
The demat account for minors is owned by a parent or a guardian. The account will be in the name of the minor, and the activities and necessary documents will be submitted by the guardian.
The necessary documents include identity proof, address proof, age proof, PAN card of both the guardian and the minor. After the verification of the documents, the account is in the opening process.
Only delivery trading is allowed in the minor demat account. There are no minor demat account opening charges, whereas,the Annual Maintenance Charge (AMC) of opening a demat account in Motilal Oswal varies with plans.
If an account is opened for a value less than 10,000, then an AMC of Rs.999 per year will be charged. You can easily open a demat account for minors in Motilal Oswal online and offline and enjoy the trading process.
Zerodha is a leading discount broker in the country. It offers trading services across various segments in the stock market. Now, you can open a demat account for minors Zerodha by following the necessary steps.
You, as a parent/guardian, can open a demat account for your kid and trade with it. The opening process requires the presence of a major. Once the minor reaches 18, he/she is required to submit a new application for account opening.
The guardian is also required to submit the KYC documents along with the minor which includes, proof of identity and address proof.
When opening a minor demat account Zerodha an upfront Annual Maintenance Charge of Rs.300, is levied. After the verification of the documents and collection of charges, the demat account is ready for functioning.
ICICIis the largest chain of private banks in India, has a very trusted client base and security. It is now possible for an investor to open a demat account with ICICI, and not just this, there is also a facility for opening a demat account for minors.
A minor, in the presence of a guardian or a parent, can open a demat account either online or offline in ICICI.
The basic required documents are the PAN card, identity proof, and address proof. These need to be produced by both the guardian and the minor.
The demat account opening charges and Annual Maintenance Charges for minors in ICICI are (•) and (•), respectively.
Sharekhan is considered an epitome in the field of retail brokers in India. Being in the business for a long time, Sharekhan has the experience and the quality that is essential for every investor.
Opening a demat account with Sharekhan is not a cumbersome process and can be carried out efficiently. Just like an individual or an NRI, Sharekhan also provides a tremendous demat account service for minors as well.
The demat account is opened in the name of the minor, but the only catch is that the minor cannot buy or sell the shares individually. All you require is an account opening form, proof of identity, and a proof of address.
There are no account opening charges for the Sharekhan Minor Demat Account. Whereas they charge Rs. 400 as the Annual Maintenance Charge on the minor demat account.
SBI Demat Account for Minors
It is out of no one’s notice that SBI securities are a pioneer name in the financial market world. SBI Securities is the brokerage house of the largest bank, the State Bank of India.
As we all know as of now, that trading is not possible without the presence of a demat account. You can open SBI demat account for minors by paying the fees of ₹100. Other than this, there are Annual Maintenance charges of Rs. 400. With the necessary documents, you can easily open a demat account for minors and start trading.
Although the account will be in the name of the minor but the trading will be handled by the parent or guardian.
Angel Broking is a leading full-service broker available in the stock market at the moment. Opening a demat account with Angel Broking, therefore, comes with a lot of benefits.
Apart from the top-notch services that they provide, they also have excellent benefits for minor demat accounts. The documents required are proof of identity, address proof, PAN card of both the guardian/parent and the minor.
The demat account for minors is a beneficial deal when you want to secure the investing future of your child, and what is better than choosing a leasing sub-broker.
There are no account opening charges in Angel Broking, and the Annual Maintenance Charges are Rs.450 per annum.
After separating its way from the IIFL securities, 5paisa became an independently run discount broker in 2017. Even in such a short span of time, 5paisa has gained enough popularity amongst the investors in the stock market.
You can easily open a trading account for your little one with 5paisa. The opening of the account happens in the surveillance of a parent or a guardian.
The necessary documents required are the address proof, aadhar card (minor and guardian), photographs, identity proof, PAN card, and the age proof of the minor.
There are no account opening charges for demat account for minors in 5paisa. When it comes to the Annual Maintenance Charges, vary with the holdings by the end of each month.
If you have less than Rs.50,000 in your account, then there are absolutely no AMC charges. If the range is between 50,000 to 2,00,000, then the charge is Rs. 8 and beyond Rs. 2,00,000, it is Rs.25.
HDFC continues to be a successful and trusted name in the financial industry. With a large number of outlets and customers, it has made its own mark.
A demat account with HDFC lets you take the benefit of a variety of services and the opportunity to trade in different segments. HDFC provides safe, seamless, and excellent services on its demat account.
If you are below the legal age (18 years) but still want to open a demat account with HDFC, it is possible. The demat account for minors is opened and operated in the surveillance of a guardian or a parent.
The benefits of opening a demat account with HDFC include free account opening.
Also, there are no Annual Maintenance Charges in the first year. In the second year, the AMC charges are Rs.750. Once the minor reaches the legal age, HDFC sends a notice to get the demat account KYC approved, thus converting the minor account to major.
IIFL, formally known as India Infoline Limited, is one of the champions in the financial market. Opening a demat account with them has a lot of benefits.
If you are thinking about opening a demat account for your minor to secure the financial future and also to give a good start in the journey, then IIFL is a good option to consider.
The opening process is easy and you can conveniently enjoy the benefits. The account opening charges are zero and the account is opened only in the surveillance of an elder, which can either be a parent or a guardian.
The customers are free of any Annual Maintenance Charges in the first year. The second-year takes the AMC charges to Rs. 450 every year.
These are the nine best demat accounts that you can consider if you are looking to secure the investing career of your little one. The demat account for minors comes with many benefits, and opening it with the best broker adds a cherry to the top.
A demat account of a minor is possible to open. Many people are switching to it because the transfer is easy, and there are not many formalities associated with it.
It stays until the person becomes a major, after which the minor demat account becomes the regular demat account. The signature of the parent or guardian is replaced with the owner’s signature.
All you need to do is produce the documents to the Depository Participant under an adult’s supervision (preferably a parent or a guardian). Only a few necessary documents are required and after the verification, the account is easily opened.
Apart from some restrictions, like the minor account holder cannot be a part of joint accounts and can only trade in delivery, everything is sorted.
If you also want to experience the market and developments a little early, you can rely on the demat account for minors.
Wish to open a Demat Account? Refer to the form below